Tax-free cars

How much of a car's price is VAT?

When buying a new car in the UK, VAT is added to the basic price of cars and options, currently charged at 20% .

This adds around £2000 - £3000 to the price of a typical small car.

Who qualifies for a tax-free car?

Anyone can buy a new car in the UK, complete a customs form VAT 411, and remove the new car from the UK to another EU country within two months (or complete a customs form VAT 410 if going to a country outside of the EU within six months). In either case, VAT will not be charged in the UK at time of registration, and the car is classified as being a tax-free car. (You should check on the regulations regarding importing a new car into the country you will be taking it to).

Can I bring a tax-free car back into the UK?

If the car is brought back permanently into the UK, VAT may be charged when the car is re-registered.

How about tax-free cars for British Forces?

A special concession for British Forces exempts them from paying the VAT on their return to the UK, provided that they have complied with the various regulations in place, such as registering the car in the country to which they exported it, and having been overseas for a minimum of six months. (Best check with your Admin Office).

Re-importing a tax-free car into the UK

On re-registering a tax-free car in the UK, the owner will need to surrender the original registration document, which is known as a pink log book (official name VX 302), and complete a form V55/5, You will also be required to show proof of insurance, in the form of a UK cover note, not a Green Card, and a valid MoT certificate, if the car is over three years old. Road tax will need to be purchased, unless the car is exempt due to low emissions.

Re-Registering your car in the UK

Most of our military customers tended to use the VRO at Maidstone to re-register their cars, and we recommended this office due to the efficient and knowledgeable way in which they dealt with military customers’ enquiries. Sadly, in order to save money, the governmenthas has now closed all VROs, and cars have to be re-regsitered via Swansea.

We offer free advice

If you are thinking of buying a tax-free car, please get in touch via our Contact Page, should you require any help or advice, which we are happy to provide, free of charge.